Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

Criticism and the Growth of Knowledge. Edited by I. Lakatos and A. Musgrave. Pp. viii, 282. £3·50, paperback £1. 1970. (Cambridge University Press.)

Beginning with Emlen (1966) and MacArthur and Pianka (1966) and extending through the last ten years, several authors have sought to predict the foraging behavior of animals by means of mathematical models. These models are very similar,in that they all assume that the fitness of a foraging animal is a function of the efficiency of foraging measured in terms of some "currency" (Schoener, 1971) -usually energy- and that natural selection has resulted in animals that forage so as to maximize this fitness. As a result of these similarities, the models have become known as "optimal foraging models"; and the theory that embodies them, "optimal foraging theory." The situations to which optimal foraging theory has been applied, with the exception of a few recent studies, can be divided into the following four categories: (1) choice by an animal of which food types to eat (i.e., optimal diet); (2) choice of which patch type to feed in (i.e., optimal patch choice); (3) optimal allocation of time to different patches; and (4) optimal patterns and speed of movements. In this review we discuss each of these categories separately, dealing with both the theoretical developments and the data that permit tests of the predictions. The review is selective in the sense that we emphasize studies that either develop testable predictions or that attempt to test predictions in a precise quantitative manner. We also discuss what we see to be some of the future developments in the area of optimal foraging theory and how this theory can be related to other areas of biology. Our general conclusion is that the simple models so far formulated are supported are supported reasonably well by available data and that we are optimistic about the value both now and in the future of optimal foraging theory. We argue, however, that these simple models will requre much modification, espicially to deal with situations that either cannot easily be put into one or another of the above four categories or entail currencies more complicated that just energy.

Citation classic - optimal foraging - a selective review of theory and tests

Knowledge Management

Econometric policy evaluation: A critique

I describe a class of models for monetary policy in which rationality is bounded by the requirement of algorithmic computability. Essentially, I add a computability constraint to the canonical model of Barro and Gordon (1983b). Discretionary policy increases uncertainty for the public and makes it difficult for the policymaker to anticipate the publicâ€™s reactions to policy. With discretionary policy and computability-constrained agents the public and the policymaker are unable to outguess one another, and there is no rational procedure that ensures the convergence of expectations. When the policymaker follows a rule, however, expectations converge and uncertainty is reduced for both the public and the policymaker.

Rules vs. Discretion Under Computability Constraints

Introduction to “Entangled Political Economy”

Purpose – To defend my past work against the charge that it has exaggerated the importance of The Sensory Order or mistaken its proper role in Hayek's scholarship.

Methodology/approach – I review the evidence given by D'Amico and Boettke and show that such evidence does not imply exaggeration or distortion regarding the nature and importance of The Sensory Order in Hayek's oeuvre.

Findings – Hayek's The Sensory Order was very important, but you can understand his economics without having read it.

Research limitations/implications – The paper only discusses some criticisms of my work on Hayek and a few related points. It does not provide a detailed or extensive account of either The Sensory Order or the role of that work in Hayek's economics.

Originality/value of paper – The work is “original” because it defends my past work against a criticism that previously did not exist. My defense is valuable to the extent that the criticism of D'Amico and Boettke is considered relevant and interesting.

Confessions of a neuro-hayekian

The Great Recession seems to be creating a New Interventionist Economics characterized by bubbles, radical uncertainty, animal spirits, complexity dynamics, and extra-market control. When placed in that order, these characteristic create the acronym BRACE. I review some evidence and literature pointing to BRACE economics and briefly suggest some avenues to challenge the new interventionists.

The New Interventionist Economics

Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F.A. Hayek, The University of Chicago Press, Chicago, London (2004) 489 + xi pp., index, US$ 55.00, ISBN 0-226-09191-0

Roger Koppl

Papers

Rules vs. Discretion Under Computability Constraints

Introduction to “Entangled Political Economy”

Confessions of a neuro-hayekian

The New Interventionist Economics

Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F.A. Hayek, The University of Chicago Press, Chicago, London (2004) 489 + xi pp., index, US$ 55.00, ISBN 0-226-09191-0